In this article you will find some useful information regarding effective methods on conducting your research into the world of precious metal investment. We will go over some of the questions you should ask yourself before investing, briefly explain the basic fundamentals, and highlight some of the most crucial terms you should know in order to make a well informed decision.

Questions to ask before investing:

Why should I invest in precious metals?

Investing in precious metals is a great way to ensure your hard-earned wealth is preserved, even in the event of inflation. Precious metals such as Gold can hold its value even at the most difficult of times and can even be a store of value if deflation should occur. Think of it as a form of financial insurance.

Gold or Silver?

Gold can be bought VAT free in the UK, which means no additional costs are placed upon the purchase price. This can be appealing to most investors looking to invest a large amount of wealth. Silver can be seen as ‘The Common Man’s Gold’ as this precious metal is more attainable and affordable compared to gold.

Where should I buy precious metals?

We always recommend buying from a reputable bullion dealer, be sure to research the companies you are interested in buying from and read through customer feedback on independent review websites. Of course we would prefer it if you bought from us at UKBullion.com, we are always happy to help and will answer any queries you have when purchasing or selling.

Basic Fundamentals:

The Bullion Market

Precious metals are traded on a 24-hour basis, mainly through The London Bullion Market Association (LBMA) in the UK and COMEX in the USA. The market consists of accredited refiners that produce and assay bullion to be traded globally.

Spot Price

The spot price is the market price at the specific time at which an asset is bought or sold for immediate payment and delivery. This is different from the futures price, which is the price at which an asset is purchased or sold for delivery in the future.

Premiums

There are additional costs in creating, testing and storing precious metals in smaller quantities which means that there will be always be a premium in addition to the spot price when purchasing smaller bars and coins.

Terminology:

Bullion – Bulk quantity of Silver or Gold

Carat -  A measure of the proportion of Gold in a Gold Alloy, on the basis that 24 Carat is pure Gold, often expressed as K (Karat) or ct.

Fine Weight – Weight of Gold contained with a Gold bullion bar or coin.

Ounce (Troy Ounce) – Traditional weight of Gold or Silver for trade. 1 troy ounce = 31.10347 Grams.

Precious Metals – Metals of significant value; Gold, Silver, Platinum, and Palladium.

Au – Chemical symbol for Gold.

Ag – Chemical symbol for Silver.

Pt – Chemical symbol for Platinum.

Pd – Chemical symbol for Palladium.